Explain. And also which the the adhering to are short-run and also which are long run adjustments? a. Wendy’s builds a new restaurant. B. Harley-Davidson Corporation hires 200 much more production workers. C. A farmer boosts the quantity of fertilizer provided on his corn cro




You are watching: Classify the following as fixed or variable costs:

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Video Transcript

your ass to distinguish between fixed and also variable prices in the brief run. So they offer us a bunch of examples nasty you come classify this as fixed or variable. That's in case of declaring expenditures the think around what they're not. Um, you have the right to we can change these in a short while. Um, and so if friend pay because that an advertisement right, that's a addressed cost. You paid for the advertisement? Um, and you salary that price him. It's done. So this is gonna solve fuel we talked about that i made instance of dare is walk to be a variable cost straight. Counts on how much girlfriend drive and you change how lot you drive through interest on company issued bonds. This is gonna it is in fixed. Costs really interest is fixed. Friend can't readjust that. Um, shipping charges. That's gonna it is in a change cost. Um, you cannot order stuff. You can, you know, ship in two various places that cost a different amount, uh, payment for raw materials. But likewise gonna be a variable talks. Um, friend can change the quantity which is walking to readjust the expense of that. We have actually real heritage taxes. This is a fixed cost. You have to pay that taxes no matter what girlfriend can. Once you in the real estate, you have to pay the tax on, uh, executive salaries. This is also fixed cost. That doesn't readjust in sure. We have insurance premiums. He's a addressed cost. Because that example, automobile insurance. What? friend buy a car, you need to pay a car insurance. No matter just how much friend drive, um, or whether or not you're making use of wage payments. These air variable costs the difficulty of earnings in short, operation If depreciation fees that's a fixed price sales taxation that's a variable prices the cracks is have the right to change. Step us to eat on. Climate we have rental payments, unleased office machinery. This is gonna obtain fixed. Expense its funding that you're renting. You have to pay the medical payments once you the very least you machinery. Um, so now we're so as to talk about fixed expenses in the brief run and long run, and also the factor all costs are change in the long run is since ah, in the lengthy run, maybe to readjust all her costs, right? all of these addressed costs, um, you're gonna have the ability to change. For this reason let's think about, um, insurance premium. Let's speak you very own a car and also you're paying automobile insurance appropriate in the short run while you're in the car. That's a solved cost. However, in the lengthy run, eventually you're gonna be able to get to escape of that car. And also you don't need to pick automobile incidents anymore, right? You have the right to sell the car. Um, girlfriend can get rid of it. If you're leasing a car, you deserve to trade that in, right? The in the lengthy run, you're gonna have the ability to stop paying that insurance premium at some point. Um, the can also go down. Friend know, it's he's expenses in the lengthy run, your fixed. And that's why I'm along where no cost is fixed. Genuine estate taxes. You deserve to sell a house, right? You can get rid the a house. You have the right to move, um, rental payments on leased office machinery. You can stop ranting maker or her you can adjust up, weaken, uh, stopped producing what you're producing. Stopped leasing the machinery, and also eventually you won't have to pay the rental payment anymore.